The former definition of "salary base" was restored to the plan for use in computing the formula benefit.
A provision was added clarifying that benefits are to be paid to a terminated participant according to the rules in effect at the time the participant terminated employment.
A break in service provision was added to clarify the manner in which the formula benefit is to be computed for persons with more than one period of service with one or more general agencies.
A provision was added to clarify that the value of the formula benefit is to be distributed as a lump sum to any beneficiary that is not a person.
Supplement One to the Staff Retirement Benefits Program
Article A
A.01 Benefits. The benefits provided hereunder are described in Articles B and C hereto and shall supplement the benefits provided in the Program. The provisions of the Program shall apply to this Supplement except as modified by this Supplement.
A.02 Participants. Each benefit program described in Articles B and C hereto shall specify the persons who are eligible to receive said benefits and such persons shall be covered by the Program in accordance with the plan as modified by this Supplement.
Article B
B.01 Amendment of Prior Program. Effective as of January 1, 1985, this Program and this Article to Supplement One shall supersede and replace the provisions of the Prior Program, with respect to persons described in Section B.03 below.
B.02 Definitions. The definitions contained in Article II of the Staff Retirement Benefits Program administered by the Administrator shall apply to this Article, except that the following terms shall have the respective meanings set forth below for purposes of this Article:
a. "Administrator" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Illinois and any successors.
b. "Approved Service Years" shall mean a Participant's Years of Service rendered prior to January 1, 1985, with pension coverage in the Prior Program, as evidenced by the Participant's record maintained by the Administrator, which record shall be subject to correction in accordance with the records of the Participant's Employer.
c. "Article" shall mean an Article of the Staff Retirement Benefits Program administered by the Administrator.
d. "Break in Service" shall mean a period of 61 or more days in which the Participant does not complete an Hour of Service.
e. "Participant" shall mean a person who meets the eligibility requirements set forth in Section B.03.
f. "Salary Base" shall mean the annual cash salary or gross wage earnings, including overtime pay, but not including such items as severance pay, the cash value of taxable fringe benefits, and the cash value of unused vacation or sick days.
g. "Service Annuity" shall mean an annuity during life, payable in monthly installments in advance, on the basis of the benefit chosen by the Participant in accordance with the provisions of Section B.04.
h. "Trustee" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Missouri and any successors.
i. "Years of Service" shall mean the total number of 12-month periods of Approved Service Years, rounded to the nearest number of months.
B.03 Eligibility. A person is a Participant for the purpose of receiving a benefit payable pursuant to the provisions of this Article if the person is described below:
a. a person who was a Participant in the Program as of January 1, 1985, and was covered by the Prior Program as of December 31, 1984; or
b. a clergyperson who was a Participant in the Ministerial Pension Plan as of January 1, 1982, and was covered by the Prior Program as of December 31, 1981;
c. a person who was receiving a benefit from the Prior Program on December 31, 1984; or
d. a person who was entitled to receive deferred vested benefits from the Prior Program.
B.04 Benefits. In addition to any benefits which may be payable pursuant to the provisions of Article V, a Participant shall be entitled to benefits based on Years of Service prior to January 1, 1985, in accordance with the following provisions:
a. Prior to January 1, 1985. All Participants who, as of December 31, 1984, were receiving benefits from the Prior Program, shall thereafter continue to receive such pension benefits in the same form and amount from this Program.
(1) The Service Annuity benefit based upon the Formula Benefit shall be adjusted annually, effective with the January payment of the Service Annuity, by an amount equivalent to the percentage of any increase in the previous June 1 National Bureau of Labor Statistics Consumer Price Index figure over the comparable figure available the prior June 1.
(A) No adjustment in an individual Service Annuity will be made until the formula annuity has been in effect for 12 or more months; and
(B) If after 1973 the Consumer Price Index decreases in any year below the Index figure of the previous year, service annuities will be reduced by that percentage of decrease, but
(C)In n o case will the Service Annuity be reduced below the original amount payable at the time the first monthly Service Annuity was paid.
b. January 1, 1985, through December 31, 1992. All Participants who retired on or after January 1, 1985, but prior to January 1, 1993, shall receive a Service Annuity based upon the following provisions:
(1) A Participant who is married on the Annuity Starting Date shall receive a Formula Benefit payable in the form described in Section 5.05a(1). The election described in Section 5.05a(3) is not available to Participants hereunder.
(2) A Participant who is not married on the Annuity Starting Date shall receive a Formula Benefit payable in the form of a single-life ten-year certain annuity.
(3) For the purpose of this Section,
(A) the term "Formula Benefits" means an annual benefit computed as follows:
1% of the average of the Participant's five highest annual Salary Bases multiplied by the total number of Approved Service Years, reduced by the lesser of (i) one-half of 1% per month or fraction of a month of age less than age 65 attained on the date the benefit is to commence or (ii) one-half of 1% per month for each month of difference between the assumed date at which 40 Years of Service would have been completed and the actual date the benefit is to commence.
(B) The Service Annuity benefit based upon the Formula Benefit shall be adjusted annually, effective with the January payment of the Service Annuity, by an amount equivalent to the percentage of any increase in the previous June 1 National Bureau of Labor Statistics Consumer Price Index figure over the comparable figure available the prior June 1.
(i) No adjustment in an individual Service Annuity will be made until the formula annuity has been in effect for 12 or more months; and
(ii) if the Consumer Price Index decreases in any year below the Index figure of the previous year, service annuities will be reduced by that percentage of decrease, but
(iii) in no case will the Service Annuity be reduced below the original amount payable at the time the first monthly Service Annuity was paid.
c. After December 31, 1992. A Participant who has not started to receive a benefit pursuant to the provisions of this Article prior to January 1, 1993, shall receive benefit payments in accordance with the Participant's irrevocable election made before January 1, 1995, as indicated below:
(1) The benefit elections were as follows:
(A) A Formula Benefit determined in accordance with the provisions of Section B.04b above.
(B) A Revised Formula Benefit which is an annual benefit computed as follows:
1.1% of the average of the Participant's five highest annual Salary Bases multiplied by the total number of Approved Service Years, reduced by the lesser of (i) one-half of 1% per month or fraction of a month of age less than age 65 attained on the date the benefit is to commence or (ii) one-half of 1% per month for each month of difference between the assumed date at which 40 Years of Service would have been completed and the actual date the benefit is to commence.
The Service Annuity benefit based upon the Revised Formula Benefit shall be adjusted annually, effective with the January payment of the Service Annuity, by an amount equivalent to the lesser of 5% or the percentage of any increase in the previous June 1 National Bureau of Labor Statistics Consumer Price Index figure over the comparable figure available the prior June 1.
(i) No adjustment in an individual Service Annuity will be made until the formula annuity has been in effect for 12 or more months; and
(ii) if the Consumer Price Index decreases in any year below the Index figure of the previous year, service annuities will be reduced by that percentage of decrease, but
(iii) in no case will the Service Annuity be reduced below the original amount payable at the time the first monthly Service Annuity was paid.
(C) A conversion of the Participant's pre-January 1, 1985, Revised Formula Benefit to an amount to be transferred to his/her Account in this Program, which amount is based upon an actuarial calculation of the present value of the Revised Formula Benefit, as determined by the Trustee.
(i) A Participant who elects the option described in this subparagraph shall cease to be a Participant in the benefits payable under this Article after the transfer of said amount to his/her Account.
(ii) A Participant who elects the option described in this subparagraph shall not be eligible for the benefit described in Section B.04d below.
(2) If no election was made, the Participant shall receive a benefit determined pursuant to Section B.04b above.
(3) A Participant who is married on the Annuity Starting Date or on the conversion date shall receive the elected defined benefit payable in the form described in Section 5.04a(1). The election described in Section 5.04a(3) is not available to Participants hereunder.
(4) A Participant who is not married on the Annuity Starting Date or on the conversion date shall receive the elected defined benefit payable in the form of a single-life ten-year certain annuity.
(5) Notwithstanding the above provisions, benefit amounts payable under this subsection for Terminated Participants shall be computed in accordance with the rules in effect at the time his/her employment terminated.
(6) If the Participant has experienced a Break in Service, each period of service with a General Agency shall be treated separately for determining vesting and computing the Formula Benefit. For each period of service, the Formula Benefit shall be determined using the number of years served during that period and the five highest annual Salary Bases earned during the same period.
d. Protection of Benefits From Prior Program. A Participant described in this Article who has an Account in the Program and who has not elected the option described in Section B.04c(1)(C) above, may elect to have an annuity based upon the election which the person has made pursuant to Section B.04c above instead of the distribution options available for the Account.
(1) At least ninety days prior to the Annuity Starting Date, the Administrator shall upon the Participant's request provide to the Participant information comparing the benefit which the person would receive using the account balance of his/her Account with the benefit the person would receive using the benefit formula which the Participant had elected pursuant to Section 5.04c above.
(2) The Participant shall make an irrevocable election to have a benefit based upon his/her post-1984 Years of Service paid using one of the following methods:
(A) the distribution of benefits described in Section 5.04 based upon the Account; or
(B) the benefit formula which the Participant had elected pursuant to Section B.04c above.
(3) If the Participant elects to convert his/her Account to a benefit payable under the benefit formula which the Participant had elected pursuant to Section B.04c above, the account balance of his/her Account shall be used to fund his/her annuity hereunder.
(4) Any amounts necessary to assure this minimum pension shall be determined by the Administrator and shall be the responsibility of the Participant's Employer.
(5) If no election is made prior to the Annuity Starting Date, the benefit shall be paid without regard to this Section.
e. Vesting.
(1) A Participant shall be fully vested in the retirement benefits set forth in this Article upon the earlier of his/her Early Retirement Age or attaining three Approved Service Years, three Years of Service (as defined in Article II) of post-1984 service, or a combination thereof.
(2) Notwithstanding the foregoing, a Participant, who participated in the Prior Program prior to January 1, 1985, for a period of less than three years, and upon termination, allows the accumulations in his/her Personal Account to remain in the Program, shall be fully Vested in his/her Service Annuity, payable in the form elected pursuant to Section B.04c above.
f. Survivor Benefits.
(1) All survivors, who, as of December 31, 1984, were receiving survivor benefits from the Prior Program shall thereafter continue to receive such benefits from this Program.
(2) Upon the death of a married Participant on or after January 1, 1985, and prior to retirement, the surviving spouse shall receive a monthly benefit equal to 70% of such Participant's Service Annuity.
(3) In the event of the death prior to retirement of a Participant who is not married, a designated Beneficiary shall receive a ten-year certain annuity actuarially calculated in accordance with the option elected pursuant to Section B.04c above.
(4) The amount of any benefit payable under this Section B.04f shall be increased in accordance with the option elected by the Participant pursuant to Section B.04c above.
(5) If the Participant's Beneficiary is other than a person, the Beneficiary shall receive a lump sum distribution of the commuted value of any benefits that may be payable.
Article C
C.01 Health Care Benefits. As a supplement to the retirement income account benefits provided by this Program and Supplement, a health care benefit described in Section C.04 below shall be provided to Participants who meet the eligibility requirements of Section C.03 below or their Surviving Spouses.
C.02 Definitions. The definitions contained in Article II shall apply to this Article, except that the following terms shall have the respective meanings set forth below for purposes of this Article:
a. "Participant" shall mean a person who meets the eligibility requirements set forth in Section C.03.
b. "Program Sponsor" shall mean an entity described below:
(1) The General Council on Finance and Administration if the Participant is a retired Employee of a General Agency which has a representative on the Committee on Personnel Policies and Practices which is a committee of the General Council on Finance and Administration.
(2) The General Board of Pension and Health Benefits if the Participant is a retired Employee of the General Board of Pension and Health Benefits.
c. "Program" shall mean a health care benefit program sponsored by a Program Sponsor in which a Participant is eligible to participate.
d. "Surviving Spouse" shall mean the person to whom the Participant is married in accordance with the law of the jurisdiction in which the Participant resides at the time of the Participant's death.
C.03 Eligibility. A person shall be eligible to receive a benefit pursuant to this Article if the person meets the following requirements:
a. has retired from an Employer, who enrolled its Employees in the Staff Pension Plan as of December 31, 1991, in accordance with the rules in effect at the time the person terminated employment with the Employer; and
b. is receiving an annuity from the Program or its Supplement, or from the Ministerial Pension Plan, if the person is a clergyperson.
C.04 Health Care Benefit. This Supplement to the Program shall provide an amount, not to exceed 100% of the premium of a Participant or a Surviving Spouse in the Program Sponsor's Program, for the purpose of providing health care coverage after retirement.
a. The amount which shall be provided shall be determined by the Administrator in accordance with rules and regulations which it may from time to time issue.
(1) The Administrator shall inform the Program Sponsors the maximum amount which will be distributed for the current year prior to January 31 of each calendar year.
(2) The Program Sponsors shall inform the Administrator of the amount needed to pay 100% of the Participant's or a Surviving Spouse's premium in the Program Sponsor's Program within a reasonable time period prior to its due date.
(3) The Program Sponsors shall provide the Administrator with any information which the Administrator deems necessary to provide this benefit.
(4) The amount provided by this Supplement shall be the same for each Participant under the same Program Sponsor within each class of coverage (i.e., Participant only, Participant plus spouse, Participant plus children, or Participant plus family, etc.).
b. The amount which is provided shall be paid to the Program Administrator of the Program Sponsor's Program.
c. Nothing contained in this Article, nor in any description of the benefit offered pursuant to this Article, shall be construed to guarantee the continuation of benefits beyond any given calendar year. This benefit may be amended or terminated by the General Conference in its sole discretion.
Article D
D.01 Assets. The assets of the Prior Program are designated as a part of this Program for the purpose of funding the benefits under this Supplement for such identified, eligible persons.
a. These funds shall be accounted for separate and apart from the other funds under this Program.
b. Notwithstanding the foregoing, the Administrator shall invest these funds and fund the annuities established hereunder in accordance with the provisions of the Program.
D.02 Funding. Except as otherwise specifically provided in this Supplement, the benefits provided under Article B shall be funded by the applicable Employer by making past service contributions through the Trustee in accordance with the schedule for such contributions determined by the Administrator on the basis of periodic actuarial valuations.
D.03 Priority Funding. The funding of the benefits payable under Article B shall have priority over the benefits payable under Article C.
a. The Trustee shall on an annual basis actuarially value the liabilities created by the benefits payable under Article B.
b. The Trustee shall determine the amount necessary to fund the benefits provided pursuant to Article B.
c. An amount equal to the amount of the assets of the Prior Program minus an amount equal to the amount determined in accordance with Section D.03b above, plus a 10% margin, shall be used to fund the benefits provided pursuant to Article C.
(1) The Trustee shall have discretion to do the following with the amount determined pursuant to this subsection, including, but not limited to:
(A) The Trustee may use only income generated by said amount to pay the benefits provided under Article C.
(B) The Trustee may use a portion of the income to increase the principal of the fund.
(C) The Trustee may use part of the principal of the fund to pay benefits provided under Article C.
(2) An Employer and/or Program Sponsor shall not be responsible for any additional funding in order to provide for this benefit.
Article E
E.01 Amendment. To provide for contingencies which may require or make advisable the clarification, modification, or amendment of this Supplement, the General Conference reserves the right to amend this Supplement, at any time and from time to time, in whole or in part, by adopting such amendment in writing. However, the Administrator is authorized to amend any or all provisions of this Supplement at any time by such written instrument in order to conform the Supplement to any applicable law and/or regulations promulgated thereunder.
E.02 Termination. The General Conference reserves the right to terminate the benefit program under Article B or the benefit program under Article C, or both at any time. The relevant provisions of the Staff Retirement Benefits Program in effect at the time of termination shall be used to administer the payment of benefits under Article B after termination.
E.03 Nonreversion.
a. Except as provided in this Section E.03, the assets of this Supplement shall never inure to the benefit of an Employer; such assets shall be held for the exclusive purpose of providing benefits to Participants and their beneficiaries and for defraying the reasonable administrative expenses of this Supplement.
b. If a contribution is made to the Program by virtue of a mistake of fact, this Section shall not prohibit the return of such contribution to the Employer upon request within one year after the Employer has reported and documented such mistake to the Administrator.
c. In the case of termination of the Supplement, any residual assets of the Supplement shall be distributed to the Employers at the direction of the Trustee if all liabilities of the Supplement to Participants and beneficiaries have been satisfied and the distribution does not contravene any applicable provision of law. The certificate of an Enrolled Actuary engaged by the Administrator stating that there are residual assets of the Supplement after all liabilities have been satisfied shall be conclusive evidence of this fact.
General Conference Webmaster: Susan Brumbaugh
PETS Creator: John Brawn
Petition Text: 21505-FA-NonDis-O
1996 United Methodist General Conference